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Friday, 27 June 2014

I attended a free talk by Chris (http://treeofprosperity.blogspot.sg/) today and have some thoughts that I would like to share on this blog. The talk was pretty well done with a great response. These are some of the takeaways that I have obtained from this.

a) Personality test
In order to know myself better, I have taken this test online and I have found myself to be ISTJ (Introvert, Sensing, Thinking, Judging). This is pretty true. I am quite the introvert and find comfort in smaller groups rather than bigger ones. It turns out that this is the Carl Jung test rather than the MBTI, but the questions asked in the link below do tell me more about myself.

You can find the link here: http://www.humanmetrics.com/cgi-win/jtypes2.asp

b) Comparing leverage with a dividend yield strategy
There was some talk about this and personally, I have experience with having leverage as I do own a property which I am renting out. One of the things about leverage is that its a double edged sword. Once you have a mortgage, your interest rates are more or less determined by the bank and the economy. In addition to that, there is also the thing about getting the right tenant and ensuring that he or she will take care of your place while renting it from you. Its also a bigger purchase in nature, compared to that of buying equities.

In the case of a dividend yield strategy, one can buy 100 leveraged properties at a smaller price in the stock market. I feel that this strategy gives a better peace of mind. I do not need to worry about getting tenants for my properties, I just need to monitor the company news to ensure that all is in order.

c) Cutting expenses and improving income
The strategy to gaining financial independence is really to cut expenses and improve your income flows. If you can have a great salary and live like a undergraduate/student, you are really on your way to financial independence. Coupled with a great investment strategy, the dream to retire by 40 makes it a lot more realistic and not just building castles in the air.

Thursday, 5 June 2014

I was wandering around Kinokuniya after having lunch with my friend at Orchard today and stumbled across the book shown below. I picked up the book and read the whole book there and then. I enjoyed the book quite a bit, but I had aching legs after that (old age). See below for some pointers that I have picked up from this book.

a) Jim Rogers retired at the age of 37

Its pretty impressive for someone to retire before the age of 40. He retired in the age of 37! My target is actually to retire by 39, he did it 2 years earlier!

b) Buy low and sell high

When it comes to investment, this mantra is always repeated and emphasized again and again. It is a simple concept but it is pretty hard to do. You basically have to go against the flow to do this successfully.

c) Form your own opinions

To be able to be a successful contrarian, one must be able to form his own opinions in the area of investments. To do this, one must perform his own research and look into every single detail to ensure that nothing is missed out.

d) Travel

Travel extensively to see the world and understand how different cultures work. Find things out for yourself and experience it. This was how he decided to invest in China after being there and couldn't help noticing the high savings rates which the Chinese people have. Do not be afraid to come out of your comfort zone.

e) History

Know your history! Frankly I hate history because it reminds me of the times in school where I had to memorize facts and figures from the textbook. But he does have a point. History does help one to know the future better.

Overall, its a pretty good read and its not a very thick book like the intelligent investor. I like the way he wrote this book like leaving some of his life lessons to his 2 daughters. It makes it very personable and left a very good impression on me. If I have children of my own in the future, I would definitely make sure to buy this book for them as a birthday present and encourage them to read it! It has valuable life lessons in it and who better to learn from than someone who retired at the tender age of 37!